The current reduction in oil production by the OPEC+ countries was an addition to the 2 million b/d reduction announced in October last year.
World oil prices rose sharply after a number of OPEC+ countries announced additional production cuts. This is evidenced by the trading data on Monday, April 3.
Trading on the stock exchange
Brent crude rose above $85 per barrel for the first time since March 7. The latest announced production cuts could raise oil prices by $10 per barrel, the head of investment company Pickering Energy Partners said on Sunday, April 2. Goldman Sachs Group raised its Brent price forecasts to $95 after the cut was announced dollars per barrel by the end of 2023 and up to $100 in 2024.
OPEC+ has very significant pricing power compared to the past, and today's surprise cut is in line with their new precautionary doctrine.” — UEFA Bloomberg note analysts, including Jeffrey Curry.
OPEC+ decision
On Sunday, April 2, the OPEC+ countries announced a reduction in oil production in May by approximately 1,16 million barrels per day. The White House said OPEC+'s decision was reckless, adding that the U.S. will work with producers and consumers, paying particular attention to gasoline prices for Americans.
Oil enters April after posting its worst first-quarter decline since 2020, according to Bloomberg. "Saudi Arabia and its OPEC partners will look to cut further sell-offs," said analysts at RBC Capital Markets LLC, including Helima Croft.
News of the cuts overshadowed the market's relief from a deal between semi-autonomous Iraqi Kurdistan and the federal government to resume oil exports via Turkey this week. The supply cuts helped WTI rise more than 9% last week.
Reduction of production
Russia has continued its voluntary reduction of oil production by 2023 barrels per day from the average production level in February until the end of 500, Deputy Prime Minister Oleksandr Novak said on April 000, his words are quoted on the government's website.
In addition, Saudi Arabia will also voluntarily cut oil production by 500 barrels per day from May until the end of 000, the Saudi News Agency reported, citing the kingdom's energy ministry.
The United Arab Emirates, Kuwait, Iraq, Oman and Algeria will also voluntarily cut production by the end of 2023, Reuters wrote. The Ministry of Energy of Kazakhstan also announced a voluntary reduction in production.
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